401K Files -- record retention

782264

Does anyone know if there is a specific federal law that requires you to keep 401K files on employees that have terminated?  We have records for some ee's that have left over 10 years ago and are looking to cleaning out files -- Our Headquarters is located in CT. 

HRforME

Minimum amount of time is 7 years for anything related to the 5500....but best business practice is "e to keep certain records for the life of the plan. This would include
all plan documents dating from the plan’s inception. The thicker the
paper trail, the easier it will be for the plan to respond to an
inquiry from a governmental agency or a request for information from a
plan participant. Most recently, the Internal Revenue Service (IRS)
requested specific employee records from a client going back 10 years
during a plan termination process..."

from retirementplanblog.com/-401-k-plans-erisa-plan-record-retention-how-long-is-long-enough.html

Having been in the 401k recordkeeping business, I can state that the employer is responsible for all plan documents and reports regardless of who the TPA or plan recordkeeper is.  You can NOT depend on them to have the information available...the responsibility falls back on the plan trustees.  Personally I would keep plan level reporting/documentation forever....but specific election forms, etc  8 years.

HRforME

Minimum amount of time is 7 years for anything related to the 5500....but best business practice is "to keep certain records for the life of the plan. This would include
all plan documents dating from the plan’s inception. The thicker the
paper trail, the easier it will be for the plan to respond to an
inquiry from a governmental agency or a request for information from a
plan participant. Most recently, the Internal Revenue Service (IRS)
requested specific employee records from a client going back 10 years
during a plan termination process..."

from retirementplanblog.com/-401-k-plans-erisa-plan-record-retention-how-long-is-long-enough.html

Having been in the 401k recordkeeping business, I can state that the employer is responsible for all plan documents and reports regardless of who the TPA or plan recordkeeper is.  You can NOT depend on them to have the information available...the responsibility falls back on the plan trustees.  Personally I would keep plan level reporting/documentation forever....but specific election forms, etc  8 years.

achamplin

We changed our policy a few years back to keep beneficiary information indefinitely if the employee still has a balance in the account.  A retired employee had passed away, and her spouse never returned the forms to receive her benefits (after more than 7 years and repeated reminders).  He then passed away.  I no longer had the beneficiary paperwork, but luckily her lawyer had a copy with the named secondary beneficiaries.  That prompted our policy change.

HRforME

Agreed. Sorry if I was unclear. The seven year mark should not start at date of termination but as of the date of final distribution of assets for that employee. If a balance remains in the plan, then ALL information on that balance should be kept!  Because that distribution will be on a future years 5500.